New York Hotels Will Never Change If Airbnb Isn’t Allowed To Flourish

New York hotels are notorious for being ridiculously expensive. Well, they are if you have your eyes set on one of many extravagant locations seen in film throughout the years. For the person staying in New York on a budget, you can either get a room in a crummy hotel on the outskirts or stay in somebody’s house via Airbnb. The latter might be a little more difficult, however, thanks to the startup running into some trouble with the state.

CNN reports that Airbnb is now fighting against what it sees as unfair regulations in New York. The state’s attorney general Eric Schneiderman wants to put in new regulations that would severely hamper Airbnb’s business of helping everyday people rent out their homes to strangers. At the moment, Schneiderman is already pushing for the identity of those who rent out their homes via Airbnb as he feels they may be violating New York’s housing laws.

Speaking at the Milken Institute’s Global Conference, Airbnb’s co-founder and CTO Nathan Blecharczyk says New York isn’t pushing for regulation that helps the everyday consumer. Instead, he sees the state just wanting to protect the status quo that sees only New York hotels being able to rent out rooms to those staying in the city. After all, opening up the homes of its citizens to tourists and visitors would pull a lot of business away from the expensive hotels. Instead of competing with that by lowering prices or offering more services, the hotel industry would prefer the state to regulate Airbnb out of existence.

Despite his objections, Schneiderman does have a point when he says that some Airbnb hosts are breaking the law. In the city, it’s illegal to host somebody for less than 30 days when the host doesn’t live in the house to begin with. Airbnb does its best to remove listings that conflict with this law and it has already removed 2,000 such listings. Schneiderman fired back by saying that Airbnb needs to police itself better and that it needs to provide data on who is listing their homes – both of which Airbnb has refused to do so far.

So, why should Airbnb be allowed to do what it wants within reason? As Blecharczyk puts it, Airbnb is pumping money into the local economy. Those who host guests in their homes take that money and spend it at the local coffee shop or other local neighborhood businesses. He also says New York should allow the company to company to collect hotel taxes so it can pump $21 million into local government coffers. That alone should be a sufficient enough reason to let Airbnb be a recognized hotel business in the state.

Like Tesla and Uber, Airbnb is an entirely new way of looking at an old problem. As such, it threatens the old businesses that have been playing by the same rules for decades. Instead of adapting to this new reality, these old businesses go to the government hoping to have these new upstarts regulated out of existence. After all, why should a hotel have to lower its prices or offer better service when it can go crying to the government? Airbnb is a breath of fresh air in New York and hotels would be wise to start competing instead of asking for regulation.

A wonderful one-sided article. If you really want to know what’s going on with Airbnb you should read the recent Times articles and the ones in New York magazine. For one, know that the Four Seasons and the Ritz hotels are not losing a single guest because the Airbnb customer is not their customer. What has thrived though is the sex trade and through Airbnb are finding better locations for their business – which was pointed out in the Times. And, probably more importantly, not every New Yorker wants an Airbnb hostel as their neighbor for all the obvious reasons, starting with the security of their building. New York City is highly regulated in terms of housing and hotels, and probably too regulated, but Airbnb needs to try to work within these rules. This should be part of their corporate execution.